FSB: Quarter of Scottish businesses unaware of the biggest change to PAYE for 60 years

Reference number: SPUPR3010

A quarter of small Scottish firms do not know about major payroll changes coming into force in six months, according to a Federation of Small Businesses'' (FSB) survey.

Figures for Scotland from a UK-wide survey showed that one in four (26 per cent) of respondents had never heard of the ‘Real Time Information'' (RTI) programme – the new way of reporting payroll – while a further 18 per cent stated that, though they''d heard of it, they had little idea of what RTI meant for their business.

RTI is a new programme designed by HMRC to gather regular information about employees. The programme aims to simplify reporting new starters and leavers, making the payroll process less burdensome. It will also support the payment of Universal Credits to those who receive them. However, two thirds (66%) of UK respondents to the FSB''s survey are not confident that RTI will achieve these objectives.

Of the 1,700 small firms with employees surveyed UK-wide, only 16 per cent of respondents were fully aware of RTI and a quarter (25%) had never heard of it, despite it being critical to the success of Universal Credit.

The research showed that, with less than six months to go until businesses have to comply with the new rules, more than 60 per cent of firms have not had any communication from HMRC about the changes. The findings show that businesses think that adapting their business processes to deal with the changes, as well as dealing with potential enquiries and inspections from HMRC, will pose a challenge to their business.

"With only six months until RTI is due to be implemented, the FSB has concerns that not enough businesses are aware that it is just around the corner. This system is linked to the UK Government''s flagship Universal Credit scheme and we''re concerned that it could flop if Government does not step up its game in communicating the changes.

"There are a number of steps that a business must complete before they can provide Real Time Information to HMRC so it is critical that Scottish businesses get up to speed. Of the very small number of firms that are aware of the change, 30 per cent have had to buy new software for their business. HMRC and Scotland''s business support agencies needs to act now so that all small firms can prepare."

ENDS

Notes to editors:

1. The FSB is the UK''s leading business organisation with around 200,000 members, around 20,000 of whom are based in Scotland. It exists to protect and promote the interests of the UK''s Real-Life Entrepreneurs who run their own business. More information is available at www.fsb.org.uk/scotland

2. The figures are based on a snap poll of FSB members, carried out by Research by Design, between 16 and 23 October 2012 which received 1,645 responses, including 151 from Scotland. To find out more visit www.fsb.org.uk/survey-panel